Hawaii mandates electronic filing for more and more taxes

Update 9.23.2019: Hawaii Department of Taxation Announcement 2019-13 (amended) states that public service companies must electronically file tax returns due on or after January 1, 2020.

Electronic filing requirements are on the rise in the Aloha State. Starting September 1, 2019, cigarette, fuel, liquor, and tobacco tax returns must be filed electronically in Hawaii. Electronic returns for the car-sharing vehicle surcharge tax, motor vehicle tax, and tour vehicle tax are required as of October 1, 2019.

Failure to file these returns electronically as required will lead to a 2 percent penalty on the amount of tax due, unless the failure is due to reasonable cause and not neglect.

This is a sign of things to come in Hawaii. According to Hawaii Department of Taxation announcements No. 2019-02, “The Department will be phasing in other tax types for mandatory electronic filing in the future.”

Electronic filing is already mandatory for some taxpayers in some states, though tax authorities will usually work with businesses that have limited access to the internet. Most states encourage all taxpayers to file and remit taxes electronically, if possible. To learn which states require electronic filing for which sellers, check out Avalara’s state-by-state guide for sales tax returns filing and remittance.